House joint committee will vote on casino bill Wednesday

CONCORD - House budget writers expect to vote Wednesday on a bill legalizing one casino in the state of New Hampshire.

A joint House Finance and Ways and Means Committee extensively studied Senate Bill 152 over the last month as the House prepares to vote on casino gambling, something it has never passed.

Thursday the committee heard from its three subcommittees - regulations, revenues and community impact - that worked on the bill.

The committees are proposing changes ranging from limitations on owners' political contributions to better defining the authority of state troopers stationed inside the casino, and from changing the licensing fee and tax rates to the length of the license.

The revenue sub-committee proposed lowering the minimum licensing fee from $80 million to $50 million and increasing the tax rate on video slot machine profit from 30 to 33.3 percent and on table games from 14 to 16 percent.

Sub-committee chair Rep. Neal Kurk, R-Weare said the committee "had one standard in mind: to maximize revenue to the state of New Hampshire."

In order to compete with a casino in the Boston area, he said, the investment needs to be at least $400 million in the facility with no deductions. The bill requires an investment of $425 million, but allows the developer to deduct the cost of the license, purchasing the facility and land and needed highway infrastructure improvements.

Kurk said the license should be limited to 20 years, which would allow developers to recoup their investment plus earn a tidy profit. After 20 years, he noted, the licensing process should begin again.

And the committee said all state revenue should go into the general fund and not be apportioned as the bill does: 40 percent for highways and bridges, 40 percent for higher education and 10 for North County economic development.

Using estimates from experts, the committee said a fully operating casino would generate between $30 million and $142 million depending on the number of video slot machines and where it is located.

The community impact sub-committee raised concerns about increasing the number of problem and pathological gamblers when a casino opens.

"You are nine times more likely to be a problems gambler if you live within 10 miles of a casino," said sub-committee chair Rep. Patricia Lovejoy, D-Stratham.

The committee estimates there will be between 4,506 and 8,828 new problem gamblers and 2,483 and 5,424 pathological gamblers. And the financial costs are extremely high, she noted.

The sub-committee also had concerns about the effect a casino would have on charity gaming in the state, which is currently a multi-million dollar operation.

Lovejoy said under the bill, too many charities would be shut out under the bill's provision guaranteeing charities operating in 2012 the same revenue they receive that year. "The state would be picking winners and losers," she said.

Another concern was the effect a casino would have on entertainment venues such as the Capitol Center for the Arts, the Portsmouth Music Hall and other similar-sized venues.

A casino can offer performers more money and charge less admission because they use entertainment to draw people to the casinos, Lovejoy said, not to make money.

Rep. David Huot, D-Laconia, who chaired the regulations subcommittee, said the goal is "to adopt an organized and fair process that adequately protects the people of New Hampshire."

He questioned if the state Lottery Commission is the right venue to regulate casino gambling or if a separate organization should do the job. Huot said the issue warrants consideration at the highest levels of state government.

Members of the regulation subcommittee will propose changes to more clearly define the state police's authority in the casinos and to limit political contributions associated with the casino.

The committee also wants to see the attorney general's authority enhanced and a judicial review process for the license selection process better defined.

Huot said the subcommittee believes final regulations need to be in place before a license is issued. "The owners should have some idea of the rules before forking over half-a-million dollars," Huot said.

He suggests additional time is needed to develop administrative rules and to perform background checks. That would still allow enough time to have the selection process completed by the end of the 2015 fiscal year, which is when the state would receive the licensing fee.

House Speaker Terie Norelli, D-Portsmouth, decided a joint committee of the House Finance and Ways and Means committee would review the bill, which allows up to 5,000 video slot machines and 150 table games.

The bill passed the Senate on a 16-8 vote and has the backing of Gov. Maggie Hassan, who included $80 million in casino licensing fees in her proposed budget.

The joint committee meets Wednesday at 9 a.m. to decide on amendments and will vote on the entire bill that afternoon.